ALBERT J. HENDERSON, Circuit Judge:
The primary issue in this appeal centers on the constitutionality of the present Alabama ad valorem property tax statutes. In their complaint filed in the United States District Court for the Middle District of Alabama, the appellants attacked the validity of the state taxing scheme on both federal and state constitutional grounds. The court rejected the federal constitutional challenge and declined to exercise pendent jurisdiction over the state constitutional claim. Finding no error in the district court’s substantive adjudication or any abuse of discretion in its refusal to exercise pendent jurisdiction, we affirm.
The genesis of the present controversy was a 1969 class action in the same court seeking to set aside the Alabama ad valorem tax system as it then existed.
See Weissinger v. Boswell,
330 F.Supp. 615 (M.D.Ala.1971). In that case, a three-judge district court concluded that the ad valorem tax laws were being administered in violation of the equal protection clause of the fourteenth amendment and Alabama law. Although at that time, the Alabama constitution specified that all property was to be assessed at an equal ratio of its fair market value, the evidence disclosed that actual assessment rates varied from approximately nine to thirty percent. Consequently, the court declared § 17(1) of Title 51 of the Alabama Code
unconstitutional and ordered all taxable property to be assessed at the fixed rate of sixty percent of the fair market value.
Realizing that compliance with the provisions of the old constitution would have an unduly burdensome effect on the state taxpayers, the Alabama legislature responded by enacting new tax laws. First, the legislature passed Amendment 373 to the Alabama Constitution which created four classes of taxable property, each with a different assessment ratio.
Class III, which consists of farm, timber, residential and historic property, is of focal concern in this appeal because subsection (j) of amendment 373 specifies that taxpayers owning this type of property could opt to have it assessed at “current use” rather than “fair market” value.
Subsection (j) does not define current use value, however, but instead authorizes the legislature to formulate procedures by which to compute it.
Concurrent with the proposal of amendment 373, the legislature adopted Act 135
to become effective upon ratification of the amendment. Act 135 defines current use as the value of the property based on its present use, without regard to potential uses.
Shortly after its implementation, Act 135 was repealed by the passage of Act 82-302
which directs that current use valuation be made by employing a “standard value” method.
Standard value can be calculated in one of two ways, depending on whether the property is agricultural or forest as opposed to residential or historic. Residential and historic land is to be valued in much the same way as set forth in Act 135.
Conversely, Act 82-302 directs that the standard value of agricultural and forest land be computed applying a capitalized net income approach.
The appellants urge that the net income method is arbitrary in that it fails to take into account any variable except the soil group of farmland or the productivity rating of timber property. It ignores such value-affecting factors as proximity to transportation facilities and the product actually grown.
Hence, the appellants argue that the use of two different methods for computation of the four types' of Class III property violates the equal protection clause of the fourteenth amendment.
The law is well-settled that “[t]he States have a very wide discretion in the laying of their taxes.”
Allied Stores v. Bowers,
358 U.S. 522, 526, 79 S.Ct. 437, 440, 3 L.Ed.2d 480, 484 (1959). They may “classify property for taxation; may set up different modes of assessment, valuation and collection; [and] may tax some lands or property at higher rates than others,” all without offense to the Constitution.
Nashville, Chattanooga & St. Louis Ry. v. Browning,
310 U.S. 362, 368, 60 S.Ct. 968, 972, 84 L.Ed. 1254, 1257 (1940).
See also Lehnhausen v. Lake Shore Auto Parts
Co.,
410 U.S. 356, 359, 93 S.Ct. 1001, 1003, 35 L.Ed.2d 351, 354-55 (1973) (“[wjhere taxation is concerned and no specific federal right, apart from equal protection, is imperiled, the States have large leeway in making classifications and drawing lines which in their judgment produce reasonable systems of taxation.”) To protect the states’ fundamental taxing authority, federal equal protection challenges to state tax laws are reviewed with a minimal level of scrutiny. A statutory classification will withstand an equal protection challenge as long as it “rest[s] upon some ground of difference having a fair and substantial relation to the object of the legislation.”
Allied Stores v. Bowers,
358 U.S. 522, 527, 79 S.Ct. 437, 441, 3 L.Ed.2d 480, 485 (quoting
Royster Guano Co. v. Virginia,
253 U.S. 412, 415, 40 S.Ct. 560, 561, 64 L.Ed. 989, 990 (1920)).
The “fair and substantial relation” standard generally has been applied liberally to invalidate state taxing classifications only when they are “palpably arbitrary.”
Randolph v. Simpson,
410 F.2d 1067, 1069 (5th Cir.1969). Even an intentionally discriminatory classification will pass muster if it “is founded upon a reasonable distinction, or difference in state policy,”
Allied Stores v. Bowers,
358 U.S. at 528, 79 S.Ct. at 441, 3 L.Ed.2d at 485, or “any state of facts reasonably can be conceived that would sustain it.”
Id.,
79 S.Ct. at 441, 3 L.Ed.2d at 486.
See also State Board of Tax Commissioners v. Jackson,
283 U.S. 527, 51 S.Ct. 540, 75 L.Ed. 1248 (1931).
The foregoing authority clearly expresses the historical policy of federal deference to state taxing power.
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ALBERT J. HENDERSON, Circuit Judge:
The primary issue in this appeal centers on the constitutionality of the present Alabama ad valorem property tax statutes. In their complaint filed in the United States District Court for the Middle District of Alabama, the appellants attacked the validity of the state taxing scheme on both federal and state constitutional grounds. The court rejected the federal constitutional challenge and declined to exercise pendent jurisdiction over the state constitutional claim. Finding no error in the district court’s substantive adjudication or any abuse of discretion in its refusal to exercise pendent jurisdiction, we affirm.
The genesis of the present controversy was a 1969 class action in the same court seeking to set aside the Alabama ad valorem tax system as it then existed.
See Weissinger v. Boswell,
330 F.Supp. 615 (M.D.Ala.1971). In that case, a three-judge district court concluded that the ad valorem tax laws were being administered in violation of the equal protection clause of the fourteenth amendment and Alabama law. Although at that time, the Alabama constitution specified that all property was to be assessed at an equal ratio of its fair market value, the evidence disclosed that actual assessment rates varied from approximately nine to thirty percent. Consequently, the court declared § 17(1) of Title 51 of the Alabama Code
unconstitutional and ordered all taxable property to be assessed at the fixed rate of sixty percent of the fair market value.
Realizing that compliance with the provisions of the old constitution would have an unduly burdensome effect on the state taxpayers, the Alabama legislature responded by enacting new tax laws. First, the legislature passed Amendment 373 to the Alabama Constitution which created four classes of taxable property, each with a different assessment ratio.
Class III, which consists of farm, timber, residential and historic property, is of focal concern in this appeal because subsection (j) of amendment 373 specifies that taxpayers owning this type of property could opt to have it assessed at “current use” rather than “fair market” value.
Subsection (j) does not define current use value, however, but instead authorizes the legislature to formulate procedures by which to compute it.
Concurrent with the proposal of amendment 373, the legislature adopted Act 135
to become effective upon ratification of the amendment. Act 135 defines current use as the value of the property based on its present use, without regard to potential uses.
Shortly after its implementation, Act 135 was repealed by the passage of Act 82-302
which directs that current use valuation be made by employing a “standard value” method.
Standard value can be calculated in one of two ways, depending on whether the property is agricultural or forest as opposed to residential or historic. Residential and historic land is to be valued in much the same way as set forth in Act 135.
Conversely, Act 82-302 directs that the standard value of agricultural and forest land be computed applying a capitalized net income approach.
The appellants urge that the net income method is arbitrary in that it fails to take into account any variable except the soil group of farmland or the productivity rating of timber property. It ignores such value-affecting factors as proximity to transportation facilities and the product actually grown.
Hence, the appellants argue that the use of two different methods for computation of the four types' of Class III property violates the equal protection clause of the fourteenth amendment.
The law is well-settled that “[t]he States have a very wide discretion in the laying of their taxes.”
Allied Stores v. Bowers,
358 U.S. 522, 526, 79 S.Ct. 437, 440, 3 L.Ed.2d 480, 484 (1959). They may “classify property for taxation; may set up different modes of assessment, valuation and collection; [and] may tax some lands or property at higher rates than others,” all without offense to the Constitution.
Nashville, Chattanooga & St. Louis Ry. v. Browning,
310 U.S. 362, 368, 60 S.Ct. 968, 972, 84 L.Ed. 1254, 1257 (1940).
See also Lehnhausen v. Lake Shore Auto Parts
Co.,
410 U.S. 356, 359, 93 S.Ct. 1001, 1003, 35 L.Ed.2d 351, 354-55 (1973) (“[wjhere taxation is concerned and no specific federal right, apart from equal protection, is imperiled, the States have large leeway in making classifications and drawing lines which in their judgment produce reasonable systems of taxation.”) To protect the states’ fundamental taxing authority, federal equal protection challenges to state tax laws are reviewed with a minimal level of scrutiny. A statutory classification will withstand an equal protection challenge as long as it “rest[s] upon some ground of difference having a fair and substantial relation to the object of the legislation.”
Allied Stores v. Bowers,
358 U.S. 522, 527, 79 S.Ct. 437, 441, 3 L.Ed.2d 480, 485 (quoting
Royster Guano Co. v. Virginia,
253 U.S. 412, 415, 40 S.Ct. 560, 561, 64 L.Ed. 989, 990 (1920)).
The “fair and substantial relation” standard generally has been applied liberally to invalidate state taxing classifications only when they are “palpably arbitrary.”
Randolph v. Simpson,
410 F.2d 1067, 1069 (5th Cir.1969). Even an intentionally discriminatory classification will pass muster if it “is founded upon a reasonable distinction, or difference in state policy,”
Allied Stores v. Bowers,
358 U.S. at 528, 79 S.Ct. at 441, 3 L.Ed.2d at 485, or “any state of facts reasonably can be conceived that would sustain it.”
Id.,
79 S.Ct. at 441, 3 L.Ed.2d at 486.
See also State Board of Tax Commissioners v. Jackson,
283 U.S. 527, 51 S.Ct. 540, 75 L.Ed. 1248 (1931).
The foregoing authority clearly expresses the historical policy of federal deference to state taxing power. In view of the wide latitude accorded the states in matters of taxation, classification schemes creating disparate tax treatment which are justified by a legitimate state purpose and are rationally related to effectuating that valid purpose will withstand federal constitutional attack.
Alabama justifies its disparate tax treatment of half of the four types of Class III property in two ways. First, it claims that individualized assessment of income-producing property is not administratively feasible because compilation of the necessarily detailed evaluations required would be an unduly tedious and time-consuming burden. Second, it asserts a special interest in preserving farm and timberland. Because the state’s desire to maintain property for these two pursuits warrants a different approach to taxation, we need not reach the question of whether administrative convenience alone would constitute a sufficient excuse.
See, e.g., Frontiero v. Richardson,
411 U.S. 677, 93 S.Ct. 1764, 36 L.Ed.2d 583 (1973) (administrative convenience alone will not justify disparate treatment based on sex).
The district court recognized that “Alabama is particularly concerned about the preservation of its agricultural and forest property and seeks through its property tax structure to preserve such property by providing additional preferential tax treatment for such property.”
Weissinger v. White,
No. 2877-N, mem. op. at 10 (M.D. Ala. Oct. 5, 1983). Record at 52. The state is free to enact measures that attempt to perpetuate certain desirable uses of its land in the face of economic pressures to convert the property to other more lucrative pursuits. Institution of a favorable tax system is one rationally related means by which to effect that end. A formula for the evaluation of farm and timber property that routinely holds assessment values below the normal selling price will certainly encourage the continued use of land for its present purpose.
Therefore, in view of
Alabama’s legitímate goal to preserve land for agriculture and forestry, we conclude that any disparity in the valuation of two of the types of Class III property is rationally related to the achievement of a permissible state purpose.
In the district court, the appellants also asserted that the tax statute violated the Alabama constitution. The district court declined to exercise pendent jurisdiction over this issue because it concerned a question of pure state law. The appellants now assign error to the court’s refusal to entertain this ground for relief.
If both the state and federal claims derive from “a common nucleus of operative fact” and are of such a nature that they ordinarily would be tried in one judicial proceeding, then “assuming substantiality of the federal issues, there is
power
in federal courts to hear the whole.”
United Mine Workers v. Gibbs,
383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218, 228 (1966) (emphasis original) (footnote omitted). Merely because the federal district court has the authority to decide a state law question, does not mean that it is obligated to undertake that task. Various courts have recognized uniformly “that pendent jurisdiction is a doctrine of discretion, not of plaintiff’s right.”
Id.
383 U.S. at 726, 86 S.Ct. at 1139, 16 L.Ed.2d at 228 (footnote omitted).
See also Williams v. Bennett,
689 F.2d 1370, 1379-80 (11th Cir.1982), ce
rt. denied,
— U.S. —, 104 S.Ct. 335, 78 L.Ed.2d 305 (1983);
Ray v. Tennessee Valley Authority,
677 F.2d 818 (11th Cir.1982), ce
rt. denied,
459 U.S. 1147, 103 S.Ct. 788, 74 L.Ed.2d 994 (1983).
Resolution of the appellants’ second cause of action would have required the district court to construe Alabama law. While clothed with this license, the district court in this case determined that the validity of a taxing statute under the Alabama Constitution is a matter best left to that state’s own courts. This exercise of jurisdictional discretion by the district court was entirely proper and did not constitute an abuse of that discretion.
See Williams v. Bennett,
689 F.2d at 1379-80.
The judgment of the district court is
AFFIRMED.